Life After Bankruptcy

As the number of bankruptcy filings rise, those who claim or who are about to, should know the possibility of getting good credit again and starting over are better than you think.  While filing bankruptcy can certainly damage one’s credit report (sometimes, legally, it can stay on your credit report for 10 years), by getting in a habit of paying bills and paying them on time, you can improve your score and soon enough, qualify for loans and/or mortgages.  If you sit down, hatch a financial plan to get on even ground, you can reach your goals.

First, contact your credit bureaus and make certain they are aware of your bankruptcy.  More often than not, they only see ongoing outstanding and delinquent accounts, which would have been dismissed through filing for bankruptcy.  Make certain they are on top of your most recent activities and do what you must to change your credit score for the better, while you work on your end to improve it.

Truth is, according to various sources, there are a couple of forms of credit required in order to immediately reboot your score.  Student or auto loans, mortgages—anything where payments are made in installments; and credit cards or home equity lines of credit. 

Even if a credit card with a limit set is utilized, this will help improve scores.  When you show you are able to meet these forms of credit, the credit bureaus delight.  Making payments on time can not only improve the scores, but will eventually allow for a greater limit on the credit card.

Most people fall into bankruptcy when they get a house, thinking they’ll have the money to pay it off in X-amount of time.  They overestimate and soon the home loans’ interest is really doing some damage. 

Bankruptcy and foreclosure—as “nasty” as they both are to meet, they can be avoided with smart planning and seeking the appropriate loans.  Pay them off regularly and your credit score will heal.  Focus on a realistic plan and later, when implemented, you’ll thank yourself as you rebuild.